Thursday Watch

Evening Headlines 

Bloomberg: 

• ECB Weighs Emergency Funding After Tsipras Wins Greece Bailout Vote. Greek lawmakers passed a bailout agreement that keeps the country in the euro for now, shifting attention to the European Central Bank as it weighs whether to pump more money into the country’s hobbled financial system. After more than four hours of debate stretching into the early hours of Thursday, 229 members of the 300-seat parliament in Athens approved new austerity measures that are a precondition of as much as 86 billion euros ($94 billion) in aid. Among those who opposed the bill were 32 members of Prime Minister Alexis Tsipras’s Coalition of the Radical Left, or Syriza, a sign the premier may have lost his majority.

• Deal Is a Disaster for the Greek Economy: Saxena. (video)

• Tsipras Must Rebuild Government After Wave of Bailout Defections. Greek Prime Minister Alexis Tsipras will have to rebuild his government after more than a quarter of his own lawmakers rebelled against a bailout that he accepted to keep the country in the euro. After more than four hours of emotional debate, 38 of Syriza’s 149 lawmakers refused to back the bill, ripping the heart out of a government that came to power on an anti-austerity platform in January. That makes Tsipras dependent on opposition votes to continue in government.

• China’s Stocks Frenzy Propped Up GDP, Raising Second-Half Doubts. China’s frenzied stock market boom -- which soured in the second half of June -- helped drive a surge in financial sector growth that underpinned the economy’s better-than-expected gross domestic product result. Financial services surged 17.4 percent in the first six months from a year earlier, according to China’s statistics authority, as exchanges and brokerages registered surging revenue amid record trading volume.  

• What China's Power Consumption Tells Us About the Economy. (video)

• China's Spending Clampdown Hurts Luxury Retailers. (video)

• Asian Stocks Rise as Greek Lawmakers Approve Austerity Measures. Asian stocks rose after Greek lawmakers passed a bailout agreement that keeps the country in the euro for now as the European Central Bank weighs whether to pump more money into Greece. The MSCI Asia Pacific Index gained 0.2 percent to 143.71 as of 9:03 a.m. in Tokyo. Greece’s parliament endorsed the bailout without the support of Prime Minister Alexis Tsipras’s Syriza bloc, as riot police tussled with protesters outside. The new austerity measures are a precondition for as much as 86 billion euros ($94 billion) in aid. Federal Reserve Chair Janet Yellen was upbeat on the economy and repeated that the Fed will probably raise its main interest rate this year.

• Kiwi to Aussie Ape Loonie Slide to 2009 Low as Commodities Slump. The New Zealand dollar slumped to a six-year low as commodity currencies tumbled after Canada’s interest-rate cut sharpened the divergence between sagging growth in resource exporters and a strengthening U.S. economy. The kiwi dropped as much as 0.8 percent Thursday to levels last seen in July 2009 after whole milk prices tumbled and inflation slowed. The loonie and the Aussie also extended losses as declining prices for the nations’ major exports spurred speculation policy makers will keep cutting borrowing costs that are already at or near record lows. Oil is set for a third weekly loss after Iran reached a nuclear deal with world powers.

Wall Street Journal: 

• Hillary’s ‘Cares About People Like You’ Problem. The public isn’t warming to her. But GOP hopefuls must show that they have the qualities she lacks.

• The Iranian Nuclear-Inspection Charade. Iran is allowed ample time, up to 24 days, to hide or destroy evidence before inspectors are given access. In the months leading up to Tuesday’s announcement of a nuclear agreement with Iran, American proponents and skeptics of the deal at least agreed on one thing: the importance of “anywhere, anytime” inspections of Iran’s nuclear facilities. On the skeptical side, House Foreign Affairs Committee Chairman Ed Royce (R., Calif.)...

CNBC:

• Netflix(NFLX) net adds, earnings top estimate; Stock pops.

Zero Hedge: 

• July 5: Greek Independence Day; July 15: Greek In Dependence Day.

• Presenting The "Greek Terms Of Surrender" As Annotated By Yanis Varoufakis.

• The Future Costs Of Politically Correct Cultism.

• China Stocks Slump Over 10% Post-Intervention: Derivatives Dealers Reveal $150 Billion In "Questionable" Exposure. (graph)

• Forget Stocks - China Is Trying To Centrally Plan Its Way Out Of Another Black Hole.

• Japan's Economic Disaster: Real Wages Lowest Since 1990, Record Numbers Describe "Hard" Living Conditions. (graph)

• White House Cuts 2015 GDP Outlook By 33%.

• Unsound Banking: Why Most Of The World’s Banks Are Headed For Collapse.

• The Oldest Trick In The Accounting Book: The Reason For Intel's Massive EPS Beat In One Chart. (graph)

• Paul Singer Blasts "Manipulated" Markets, Says China Collapse "Way Bigger Than Subprime".

• Hillary Clinton Blasts High Frequency Trading Ahead Of Fundraiser With High Frequency Trader.

• Auto Loan Rejection Rate Falls To Lowest Level On Record. (graph)

• A Complete Farce: Ex-Obamacare Head To Lead Health Insurance Lobby.

• Bonds Bid, Stocks Skid, & Crude Crushed As Yellen Pleads & Greece Bleeds. (graph)

Telegraph: 

• Greece news live: Greek parliament passes controversial austerity bill. Greek parliament approves bill of tough reforms demanded by the country's creditors in return for a new bail-out, as protests turn violent.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are -.25% to +.50% on average.

• Asia Ex-Japan Investment Grade CDS Index 107.5 -1.0 basis point.

• Asia Pacific Sovereign CDS Index 59.75 +.5 basis point.

• S&P 500 futures +.29%.

• NASDAQ 100 futures +.25%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (BBT)/.70

• (BX)/.47

• (SCHW)/.24

• (C)/1.35

• (DPZ)/.79

• (EBAY)/.72

• (GS)/3.94

• (KEY)/.28

• (PM)/1.13

• (PPG)/1.64

• (SHW)/3.81

• (UNH)/1.58

• (AMD)/-.17

• (CTAS)/.85

• (GOOG)/6.69

• (SLB)/.79

• (SWI)/.46

Economic Releases

8:30 am EST

• Initial Jobless Claims are estimated to fall to 285K versus 297K the prior week.

• Continuing Claims are estimated to fall to 2300K versus 2334K prior.

10:00 am EST

• Philly Fed Business Outlook for July is estimated to fall to 12.0 versus 15.2 in June.

• The NAHB Housing Market Index for July is estimated at 59.0 versus 59.0 in June.
  

4:00 pm EST

• Net Long-term TIC Flows for May are estimated to fall to $30.0B versus $53.9B in April.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Yellen Senate testimony, ECB's Draghi speaking, ECB rate decision, weekly Bloomberg Consumer Comfort Index, Bloomberg Economic Expectations Index for July, weekly EIA natural gas inventory report and the (RIO) operational update could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by real estate and consumer shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.